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The rate of return on the common stock of Luna Lights is expected to be 11.5 percent in a boom economy and 4.5 percent in

The rate of return on the common stock of Luna Lights is expected to be 11.5 percent in a boom economy and 4.5 percent in a normal economy. The probability of a boom is 23 percent. What is the standard deviation of the returns on this common stock?

  • 2.47%

  • 5.63%

  • 8.68%

  • 2.95%

  • 6.11%

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